Cascade Group Ltd v Royal Insurance Australia Ltd & Ors [1992] QCA 293

IN THE COURT OF APPEAL [1992] QCA 293 QUEENSLAND Appeal No. 70 of 1992 Before the Court of Appeal The President Mr. Justice Pincus Mr. Justice Ambrose BETWEEN: CASCADE GROUP LIMITED (Plaintiff) Respondent - and - ROYAL INSURANCE AUSTRALIA LIMITED (First Defendant) CONTINENTAL PACIFIC INSURANCE COMPANY (AUSTRALIA) LIMITED (Second Defendant) SUN ALLIANCE INSURANCE LTD. (Third Defendant) NEW ZEALAND INSURANCE CO. LTD. (Fourth Defendant) CIGNA INSURANCE AUSTRALIA LTD. (Fifth Defendant) Appellants JUDGMENT OF THE COURT Delivered the Third day of September 1992 MINUTE OF ORDER: Appeal dismissed with costs to be taxed. CATCHWORDS: Insurance. Construction of Policy. Applicant/insurers appeal against it for respondent following armed robbery when money stolen from bank - whether money "in transit" despite having been deposited in night safe - whether money "stored" at the bank and thus a "situation" for the purposes of the policy. Counsel: C. Hampson Q.C., with him A.J.H. Morris, for the appellants -- 1 of 9 -- 2 S.E.J. Jensen for the respondent Solicitors: Quinlan Miller & Treston for the appellants Carter Newell for the respondent Hearing date: 3 September 1992 -- 2 of 9 -- IN THE COURT OF APPEAL QUEENSLAND Appeal No. 70 of 1992 BETWEEN: CASCADE GROUP LIMITED (Plaintiff) Respondent - and - ROYAL INSURANCE AUSTRALIA LIMITED (First Defendant) CONTINENTAL PACIFIC INSURANCE COMPANY (AUSTRALIA) LIMITED (Second Defendant) SUN ALLIANCE INSURANCE LTD. (Third Defendant) NEW ZEALAND INSURANCE CO. LTD. (Fourth Defendant) CIGNA INSURANCE AUSTRALIA LTD. (Fifth Defendant) Appellants JUDGMENT OF THE COURT Delivered the Third day of September 1992 The appellants have appealed against a judgment for $79,522.95 and costs given in favour of the respondent in the District Court at Brisbane on 2 April 1992. The appellants were, at material times, the insurers of the respondent under a special risks insurance policy. Shortly before midnight on 16 June 1991, the respondent deposited money in the night safe at the A.N.Z. Bank, Cronulla, in the State of New South Wales. At about 8.45 a.m. on 17 June, employees of the Bank went to the night safe, opened it, removed the wallets which contained the money and placed them in two plastic bags, carried the plastic bags to the front counter of the bank and placed -- 3 of 9 -- 2 them, unopened, in front of a booth at that counter. The money remained the property of the respondent. The wallets were to be dealt with further, by bank staff and probably also the respondent, before property in the money would pass to the bank. Before the bank opened to the public on 17 June, the wallets, including the money, were stolen during an armed robbery. The primary Judge held that the appellants are liable to indemnify the respondent. There is no dispute as to the facts, and the issue for determination turned solely upon the construction of the relevant policy of insurance. By the terms of the policy, the appellants agreed to indemnify the respondent "in the event of any physical loss ... not otherwise excluded happening at the Situation to the Property Insured ...". So far as presently material, the property insured includes all real and personal property "belonging to the Insured", and "personal property" includes "Money ... whilst contained in the Situation and whilst in transit to and from the Situation anywhere in Australia, including whilst contained in the night safe of any bank ... where the Insured transacts business, and in the personal custody of the Insured and/or persons authorised by the Insured whilst contained in their private residences". The schedule to the policy defines "The Situation and/or Premises" as "Anywhere In Australia Where The Insured Has Property Or Carries On Business Has Goods Or Other Property Stored Or Being Processed Or Has Work Done". The primary Judge found that, for present purposes, -- 4 of 9 -- 3 "the definition of 'the Situation' should not be read as meaning anywhere in Australia where the insured has property of any description but "anywhere in Australia where the Insured 'has property' in the sense of premises". Further he said: "The alterative requiring consideration is encompassed by the words 'whilst in transit to and from the Situation anywhere in Australia'. The other alternatives are excluded on the agreed facts. The loss of the property insured occurred whilst it was in transit from the 'Situation', as the latter term is understood in the policy. The property insured remained in transit from the premises of the plaintiff to a point when property in it was to pass to the bank." The appellants' submission is that the concept of "transit" in the policy is not concerned with the passing of property but with physical movement. That is obviously correct and, while the respondent sought to support the judgment on the basis that the loss occurred while the money was "in transit", its argument in this regard was based upon highly artificial theories of physical movement within the banking process or in the course of the robbery. It is unnecessary to analyse and rebut these submissions in detail. It is plain that the transit had finished when the money was deposited in the night safe, although the policy extended the insured's right to an indemnity beyond the completion of transit whilst the money was "contained in the night safe" : cf. Pennysylvania Company for Insurances on Lives and Granting Annuities v. Mumford (1920) 2 K.B. 537. However, the respondent also sought to sustain the judgment on a number of other bases. -- 5 of 9 -- 4 The first was that, since the property remained in the respondent, the loss occurred "anywhere in Australia where the insured has property", "anywhere in Australia where the insured ... has goods", and "anywhere in Australia where the insured has ... property stored or being processed or has work done". It was submitted for the respondent that the primary Judge was incorrect when he restricted the definition of "the Situation" to exclude places where the insured has property other than property "in the sense of premises", and argued that "Situation", as defined "contained a number of qualifying options which readily contemplate losses at places other than the Plaintiff's premises". It was said that the extremely wide definition should only exclude losses of property outside Australia. The respondent's final submission depends upon importing the definition of property, including personal property, into the definition of "the Situation and/or Premises". Both the general context, which is concerned with a place or location, and the specific context, which elaborates upon the places or locations encompassed in the definition, are against this view. The respondent's submission also illegitimately seeks to separate "goods" from "property" in the phrase "Goods or Other Property Stored", etc in the definition of "The Situation and/or Premises". Apart from premises owned by the respondent or where it carries on business, that definition is concerned only with places where the respondent's property (including money) is stored or being -- 6 of 9 -- 5 processed or, in the case of appropriate property, is having work done on it. Accordingly, unless the money was in "transit", for the respondent to succeed it must demonstrate that, at the material time, the money was either "stored" or "being processed" at the bank. The specific reference to money in a bank night safe provides little assistance in relation to the proper construction of the policy for present purposes. While the phrase "including whilst contained in the night safe of any bank ..." may involve some overlap with what is otherwise covered by the policy, that is understandable given the disputes which might otherwise arise concerning whether money in a night safe is "in transit", "stored" at the bank or in neither category (and therefore perhaps uninsured). That said, it remains to be decided whether money which bank staff have removed from the night safe to "process" in accordance with the bank's agreement with its customer is "stored" at the bank during the period before the bank opens and the customer comes to retrieve the property. The agreement between the respondent and the bank with respect to the use of a night safe is contained in the material before the Court and includes terms which emphasise that, during that period, the money is in the bank's custody. The terms of that agreement warrant the conclusion that the respondent's money was stored at the bank at the relevant time : see, for example, cll. 5, 9, 10 (1st para.) and 11 (1st para.). Further, the agreement and the -- 7 of 9 -- 6 description of the activities which take place at the bank, (which were only briefly described in the material) suggest that, in the period between the removal of money from the night safe and its re-delivery to a customer, the bank may also be said to process the money. However, it is unnecessary to pursue this in view of the conclusion that, in the material period, the money is "stored" at the bank and that the bank is, consequently, a "Situation" for the purposes of the policy. Accordingly, the appeal should be dismissed, with costs to be taxed. -- 8 of 9 -- IN THE COURT OF APPEAL QUEENSLAND Appeal No. 70 of 1992 BETWEEN: CASCADE GROUP LIMITED (Plaintiff) Respondent - and - ROYAL INSURANCE AUSTRALIA LIMITED (First Defendant) CONTINENTAL PACIFIC INSURANCE COMPANY (AUSTRALIA) LIMITED (Second Defendant) SUN ALLIANCE INSURANCE LTD. (Third Defendant) NEW ZEALAND INSURANCE CO. LTD. (Fourth Defendant) CIGNA INSURANCE AUSTRALIA LTD. (Fifth Defendant) Appellants The President Mr Justice Pincus Mr Justice Ambrose Judgment of the Court delivered on the Third day of September 1992 APPEAL DISMISSED WITH COSTS TO BE TAXED -- 9 of 9 --